ISSUE NO. 54 · MONDAY 19 OCTOBER 2026

Lloyds fell 2.5% on bank tax reports, the economy grew 0.1% in August, and £1bn of office rates are on the table

Lloyds lost 2.5% on Friday on a report rather than an announcement. Reversing the 2023 cut to the bank surcharge would raise about £2bn a year — but the shares moved before anyone had confirmed a thing.

That is the week in one trade. The Budget is being drafted in public and every leak carries a price: a levy on lenders, a rates raid on London offices, a National Insurance threshold business wants lifted. Meanwhile the economy grew, barely, on the back of one sector.

Below: the tax the market priced early, a month that beat the forecasters, a raid on the Square Mile, eight numbers, the week ahead and one calculator — then everything else from the week.

Lead

Lloyds fell around 2.5% to 103.40p on reports the Chancellor has settled on the banks.

NatWest dropped 2% to 660.40p and Barclays slipped 0.4% to 430.50p, so Lloyds took the heaviest knock. The 2023 cut took the surcharge from 8% to 3%; putting it back would raise roughly £2bn a year, and Positive Money puts a full windfall tax at £19bn. The City lobbied hard and lost. The counter-argument is comparative: PwC puts total taxes on UK banks at 46% of profits, against 42% in Amsterdam and 29% in Dublin. Read the full story →

The Numbers

Eight numbers. Bank Rate and CPI are unchanged, the index finished Friday close to its 12-month high, and pay is still ahead of prices.

More News

The economy grew 0.1% in August when forecasters had pencilled in a contraction.

Production expanded 0.8% and carried the month on its own. Services, by far the largest sector, recorded no growth at all, and construction fell 0.2%. Across the three months to August output rose 0.7%. Paul Dales at Capital Economics sees firms holding up while consumers turn cautious, with consumer-facing services the soft spot. A beat is welcome, but a month resting on one small sector is not much to build a forecast on. Read the full story →

Higher business rates on offices above £500,000 are being weighed, worth about £1bn.

The tax firm Ryan reckons around 9,000 properties across London and the South East would be caught, with the Square Mile and Canary Wharf taking the brunt. Larger shops and hospitality are exempt, so the business districts pay. The City Property Association and BusinessLDN warn it would deter investment. Bank chiefs are already braced for a levy, so the City faces a second raid on the same patch, and this one lands just as London offices had started to recover. Read the full story →

The Brief

Everything else published last week, newest first.

• Nvidia Pledges Five Years of Compute to UK AI Safety — $250m of compute for three universities.
• UK Government Spending Set to Outpace G7 Bar Germany — The state at 43.3% of GDP by 2030.
• Benefits for Foreign Nationals Bill Heading for £27bn — The CSJ’s figure; the government disputes it.
• National Insurance Threshold Fight Heads to 28 October — The CBI wants it up a thousand pounds.
• Salience Labs Raises £94m to Scale Photonic Chips — AMD and Intel back an Oxford chip firm.
• London IPO Drought Deepens While Global Floats Boom — One listing all quarter, against 387 worldwide.
• Sunday Trading Could Be This Budget’s Cheapest Win — Six hours is still the limit.
• ISA Millionaires Hit a Record 7,730, Up More Than 50% — Patience rather than windfalls.
• Welfare Reform Can No Longer Be Dodged in Westminster — Two reviews land as the jobs gap widens.
• UK Inflation Second-Highest in G7 Despite Faster Growth — A seventh year above the target.
• UK Retail Sales Face a Budget Test After Weak September — Growth down to 1.3% on the year.
• Burnham’s Rates Cut Is Not Enough to Stop Pub Closures — A pub a day, relief waits until spring.
• BP’s Green Energy Bet Keeps Costing Billions — A write-down of up to $4.5bn.
• Bellway Profit Jumps 22% but Warns on Help to Buy — £270m pre-tax, and a warning attached.
• London Is Being Sold Faster Than It Can List — Forty-two live bids for London companies.

The Week Ahead

• Tuesday, 7.00am BST — UK labour market, October. Pay growth and the jobless rate, the last full read before the Budget.
• Wednesday, 7.00am BST — Consumer price inflation, September. The number the Bank carries into its November decision.
• Wednesday, 7.00am BST — Public sector finances, September. How much the Chancellor borrowed last month, a week before he stands up.
• Friday, 7.00am BST — Retail sales, September. Whether shoppers held their nerve through the Budget speculation.

The Toolbox

One tool from the site each week, picked to fit what has just happened. Free, no sign-up, and it shows its workings.

Savings Interest Tax Calculator

“Savers are the quiet half of any argument about bank profits. This works out how much of the interest you earn goes to the taxman before it reaches you.”

The Close

Notice what actually moved the shares on Friday. Not a policy, not a costing — a report that a decision had been taken. The Budget is already being priced in instalments, which may make the day itself the quietest part of it. Unless something in it has not leaked yet.

If something here is wrong, or there is something you want dug into, just reply. It comes straight to me.

MJB